Ministry hits out at "fake news" over "ownership" of state-owned enterprises
The Government remains hundred percent or majority shareholder of all Stated-owned Enterprises (S.O.Es) in Samoa.
This was highlighted in a press released issued by the Ministry of Commerce, Industry and Labour (M.C.I.L.), following what the Ministry described as “fake news on the ownership of all S.O.E.s and Samoa Land Corporation (S.L.C.)”.
The Ministry said the Government assigns a Minister to oversee its board and operations on behalf of Samoa.
“These Ministers are recorded on the registry to confirm the Government’s shares of the S.O.E., but are not and cannot be deemed to have personally become shareholders themselves. They are duty bound to their Cabinet and legal responsibilities as representatives of the Government’s shares.
“The performance, therefore, of S.O.Es has a significant impact on the public and the economy in general through the goods and services S.O.Es provide.
“This means that high standards of corporate governance of S.O.Es are critical to ensure their financial stability and contribution to Samoa’s sustainable development.”
The Ministry said an S.O.E. can exist as a public beneficial body, which is an entity that provides services to the community or it can also exist as a public trading body, which is mainly for optimising returns on investment of public funds, such as the S.L.C.
“S.L.C. was established as a company in 1990 under the Companies Act 1955 and continued by virtue of registration in accordance with the Samoa Companies Act 2001.
“A total of 24,000 acres of land previously owned by the then Western Samoa Trust Estates Corporation (W.S.T.E.C.) was vested to S.L.C.
“Therefore S.L.C. was mandated to consider viable commercial opportunities that would generate revenue for Government, through the proper management of Government land assets.”
S.O.Es that are public trading bodies, the statement said, are registered as a company under Samoan law and operate as a separate and independent legal entity.
“This is important as investment comes with risks and establishing a company structure allows for the protection of public funds managed by the Ministry of Finance from exposure to any liabilities arising from the dealings of an S.O.E. Ltd.
“The shares of an S.O.E. Ltd are held by the Minister of Finance and the Minister responsible for the S.O.E. and these shares are held by the shareholding Ministers on behalf of the Government of the Independent State of Samoa. All dividends payable for these shares are paid to the Ministry of Finance and not to the Ministers holding the shares.
“Samoan law requires S.O.Es to table annual reports in Parliament so that Samoans are informed on the operations of corporations. As an example: the 2017/18 annual report of the Samoa Land Corporation (S.L.C.) explains how a 40 percent increase in revenue over the previous year has been achieved while in the same period costs have been reduced by 30 percent percent.
“Samoa’s laws insist this Corporation must make a profit and achieve at least a 7 percent return and a 50 percent dividend to Government.
“In the financial year 2017/18, the Corporation reports how it achieved an 8 percent return and recorded a net profit after paying tax of T$2.1 million at the end of the financial year 2017/18 with 50 percent of this amount payable to Government as a dividend for the year.”
An S.O.E. is designed to allow the efficiency of market approaches to the supply of important services that our community requires, such as water and electricity, while at the same time allowing the Government to continue to monitor and hold these operations accountable on behalf of the community, said the statement.
Samoa has 26 public bodies, of which 15 are S.O.Es. A great deal of information, including data about the financial performance of Samoa’s S.O.E portfolio, can be found at http://www.pacificsoe.org/samoa/source-of-data/